‘True Finns’ Threaten EU Bailout Plans

By Arild Moen

“I’m not a bad person,” says Finnish politician Timo Soini, a populist who could come to block EU efforts to bail out debt-ridden Portugal the way it has aided Greece and Ireland.

“I’m just saying that bailing out these countries is not going to function,” the chairman of the EU-Skeptic True Finns party says.

Since the last election in 2007, he has managed to transform a marginal party into a major political force to be reckoned with ahead of Finland’s general elections on April 17.

As Finland heads to the polls Sunday, a rise in popular support for opposition parties could jeopardize the country’s support for euro zone policies and hamper efforts to approve more sovereign bailouts and stabilize economies in the bloc.

Recent polls suggest the populist True Finns party is gaining traction among the electorate, benefitting from disquiet among voters who remain concerned about Finland’s participation in sovereign bailouts in the euro zone.

In theory, a new Finnish government that is opposed to further bailouts of euro-zone countries could prevent new rescue loans, since they have to be agreed unanimously by all euro members.

“It is outrageous that countries which have governed their economy badly are now putting their problems and debt on to Finnish taxpayers, that is not our duty to take on,” Mr. Soini says.

Anger at the bailouts has been a factor driving a rise in support for the right-of-center National Front in France’s recent local elections, and contributed to the weak performance of Germany’s governing parties in recent state elections.

So far, Finland has committed to guarantee almost €8 billion related to the European Financial Stability Facility (EFSF), and further guarantees and investments of €12.58 billion related to the European Stability Mechanism (ESM), which is planned to begin functioning in 2013. Finland has also given a €1.48 billion loan to Greece, a €160 million loan to Iceland and promised a €324 million loan to Latvia.

“When Greece collapsed it was said that this would be the last country to help. Then, came Ireland, now Portugal and I’m afraid Spain and Italy are next in the queue,” Mr. Soini said, adding, “hopefully not.”

His main arguments are that the EU is not permitted to fund the debt of European countries and that the European Central Banks should not buy their bonds to support.

“This is why the EFSF mechanism is temporary and the ESM is scheduled to come into force in 2013,” he says.

Euro-zone governments are now faced with the task of making an amendment to the Treaty on the Functioning of the European Union, in order to make a permanent bail out mechanism.

“This is why I don’t want us to throw our money away. As it is, this is not a secure way of doing it. It does not function,” said Mr. Soini.

According to an opinion poll conducted by TNS Gallup on behalf of the Finnish newspaper Helsingin Sanomat between April 5 and 10, 16.9% of voters intend to back the party, down from a record high of 18.4% in March, but still a huge increase from the 4.1% of votes it received in the 2007 election.

That makes The True Finns the fourth largest party ahead of Sunday’s election, behind the liberal National Coalition Party (20.2%), led by Finance Minister Jyrki Katainen; the main ruling agrarian Center Party (17.9) led by Prime Minister Mari Kiviniemi; and opposition Social Democratic Party (18.0%).

However, the polled support for the True Finns has a margin of error of 4% either way. The reason is that there is not enough reliable data from previous elections to make predictions on how their supporters actually will behave when casting their vote. The margin of error is two percentage points for all the other parties.

“Now, the Finnish electorate has a say,” Mr. Soini says, adding: “If the True Finns win we will renegotiate what the current government has promised.”

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